Professor Steve Hanke has ranked Zimbabwe’s ZiG currency as the world’s second worst, losing 50% of its value against the US dollar due to inflation. With a current black-market trading rate significantly higher than the official rate, public trust in the currency remains low, exacerbated by government policies. The Reserve Bank of Zimbabwe asserts commitment to stabilizing the currency despite these challenges.
Professor Steve Hanke, a respected economist, has classified Zimbabwe’s ZiG currency as the second worst globally, following Venezuela’s Bolivar. His recent findings reveal that the ZiG has suffered a staggering 50% depreciation against the US dollar over the past ten months due to rampant inflation. In comparison, the Bolivar decreased by 52%, with the Iranian Rial and Ethiopian Birr trailing with losses of 24%.
Initially introduced at a rate of US$1 to ZiG2.50 last year, the currency currently trades between ZiG33 and ZiG40 on the black market, indicating its significant devaluation. The lack of public confidence in the so-called ‘gold-backed currency’ is a primary factor contributing to its diminished value.
Furthermore, Zimbabwe’s informal economy reflects a reluctance to comply with the government mandate, which stipulates that all transactions should occur at the official rate of US$1 to ZiG26. Hanke’s report coincides with statements from the Reserve Bank of Zimbabwe (RBZ), which asserts its commitment to the ZiG’s success, particularly its stability.
The RBZ has faced criticism over the government’s inconsistent enforcement of the currency’s use for essential purchases, including fuel and passport fees. Dr. John Mushayavanhu, the RBZ governor, asserted the existence of “adequate use case scenarios for ZiG at the moment” during a recent assembly with the Tourism Business Council of Zimbabwe (TBCZ).
In summary, Zimbabwe’s ZiG currency has been severely impacted by inflation, losing half its value against the US dollar, thereby ranking as the second worst globally. A lack of trust in its stability and poor government policy enforcement contribute to this decline. The RBZ’s commitment to stabilizing the currency faces significant challenges amid public hesitation to use the official rate.
Original Source: www.newzimbabwe.com
